Arizona law requires that you disclose certain aspects about the condition of your property, including known defects, problems and other important factors that could otherwise negatively affect the value of the home, before you sell it. This is done by relying on a form called the SPDS, or the Residential Seller’s Property Disclosure Statement (SPDS). You are required to disclose any material defects about the property even if you are not asked by the buyer or a real estate agent.
A material defect is anything about the property that would make a difference to the value of the property or affect the way that the property can be use. Basically, if there is an issue with the property that you think might impact a buyer’s decision to purchase the property, then you need to disclose it. Although, you do not need to disclose insignificant issues like normal wear and tear such as a nail hole in the drywall where a picture was once hung.
Disclosure laws are nothing new for residential real estate transactions in Arizona and date back to Hill v. Jones, 151 Ariz. 81, 725 P.2d 1115 (1986). In a typical scenario, the seller will fill out the SPDS form to the best of their knowledge and deliver this completed written disclosure to the buying party in advance of the sale. The buyer can then review the information that has been disclosed by the seller and determine whether they are still interested in buying the home; whether they want further inspections conducted; whether they want certain provisions offered in the sale; or whether they are no longer interested in purchasing the home.
Failure to disclose important defects or flaws can, and does, result in lawsuits being filed after the fact; especially when defects are later discovered. Nobody wants a home sale to result in a court case. Here is how you can avoid real estate non-disclosure litigation in Arizona.
Disclose, Disclose, Disclose!
The first rule of thumb is that you should disclose everything that you could possibly know about any potential defect in your property beforehand. When in doubt, disclose it out!
It is in your best interest to honestly answer questions about the structure of the home, the roof, disclosing repair records, issues in plumbing, rodent or insect infestations, and more. It also means disclosing simpler information like utility providers, sewage and trash services, internet and cable, police and fire and even postal delivery information.
Furthermore, as a seller, you are also required to disclose any known environmental issues, including things like drainage, excessive traffic conditions, and even noise from a nearby highway. Anything else that you may consider c disclosing, but are not sure about, can be disclosed in the “Other Conditions and Factors” section of the SPDS form—which allows a seller to disclose any material factor concerning the home that may affect the final value of the property. To aid further, here is a checklist we created to help you better understand Arizona real estate disclosures.
How to Avoid Real Estate Non-Disclosure Litigation in Arizona
While certain lawsuits may not be avoidable, with proper carereal estate non-disclosure lawsuits can almost always be avoided. To best avoid litigation, you’ll want to make sure you understand how the law works and how it applies to residential home sales between parties in Arizona.
- Have your home inspected by a reputable company before you fill out your SPDS form to determine if there are any known flaws are defects you may be unaware of.
- Ask your realtor to fully explain how the disclosure process works and have them help you fill out your SPDS form.
- Consult with an experienced Arizona real estate law firm before you sign the SPDS form to ensure that you’ve met the requirements of the law by providing a review and offering you counsel beforehand.
The attorneys at MacQueen & Gottlieb have significant experience with real estate law in Arizona. Our attorneys can assist you with any disclosure issues and help you understand what will be required if you are considering selling your home. If you were involved in a real estate transaction where one party withheld material facts, our attorneys can assist you in pursuing that case. Contact us today at (602) 726-2229 to schedule an initial consultation or make an appointment online.